It’s not just the value of bitcoin that has soared in the last year – so has the huge amount of energy it consumes.
The cryptocurrency’s value has dipped recently after passing a high of $50,000 but the energy used to create it has continued to soar during its epic rise, climbing to the equivalent to the annual carbon footprint of Argentina, according to Cambridge Bitcoin Electricity Consumption Index, a tool from researchers at Cambridge University that measures the currency’s energy use.
Bitcoin mining – the process in which a bitcoin is awarded to a computer that solves a complex series of algorithms – is a deeply energy-intensive process.
“Mining” bitcoin involves solving complex math problems in order to create new bitcoins. Miners are rewarded in bitcoin.
Earlier in bitcoin’s relatively short history – the currency was created in 2009 – one could mine bitcoin on an average computer. But the way bitcoin mining has been set up by its creator (or creators – no one really knows for sure who created it) is that there is a finite number of bitcoins that can be mined: 21m. The more bitcoin that is mined, the harder the algorithms that must be solved to get a bitcoin become.
Now that over 18.5m bitcoin have been mined, the average computer can no longer mine bitcoins. Instead, mining now requires special computer equipment that can handle the intense processing power needed to get bitcoin today. And, of course, these special computers need a lot of electricity to run.
The amount of electricity used to mine bitcoin “has historically been more than [electricity used by] entire countries, like Ireland”, said Benjamin Jones, a professor of economics at the University of New Mexico who has researched bitcoin’s environmental impact. “We’re talking about multiple terawatts, dozens of terawatts a year of electricity being used just for bitcoin … That’s a lot of electricity.”
Environmentalists say that mining is a cause for concern particularly because miners will go wherever electricity is cheapest and that may mean places that use coal. According to Cambridge, China has the most bitcoin mining of any country by far. While the country has been slowly moving toward renewable energy, about two-thirds of its electricity comes from coal.
A single transaction of bitcoin has the same carbon footprint as 680,000 Visa transactions or 51,210 hours of watching YouTube, according to the site.
Another study from the UK published last year said that computer power required to mine Bitcoin quadrupled in 2019 compared with the year before, and that mining has had an influence in prices in some power and utility markets.
The creators of ethereum, considered the second most popular type of cryptocurrency after bitcoin, have promised to change the currency’s algorithm to make its mining more environmentally friendly.
Vitalik Buterin, the computer scientist who invented ethereum, told IEEE Spectrum that mining cryptocurrency can be “a huge waste of resources, even if you don’t believe that pollution and carbon dioxide are an issue”, Buterin said. “There are real consumers – real people – whose need for electricity is being displaced by this stuff.”
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